I'm trying to find the relationship between economic growth, environment and industrialization
the ind. variables are CO2 emissions and energy consumption.
the dependent variable is GDP
however I need a control variable? any suggestions?
also, how can we measure industrialization ? would energy consumption be enough as an indicator?
Dear,
The level of industrialization can be approximated using the share of industrial or more specifically manufacturing goods to GDP. To explain GDP Number of scientists in a given country, share of Research and development expenditure to GDP, human development index (the higher the index the higher the level of GDP), percentage share of urban population etc., can be considered as possible candidates.
Dear Vanli,
You could use gross fixed capital formation as a control variable.
Best regards.
Dear Tara,
One important variable that can be use for control is temperature. This is the variable that most people are concerned about. The Goddard Space Institute in NY keeps temperature data. You may also want to explore (el/la nino) sea temperature data as well. Keep in mind that variation of temperature between the poles and the equator is another subtle temperature variable. Also, I think that population variable should figure into the study as well.
Good luck in your research.
Dear Tara Vanli
The relationship of environment and economic growth relates to the political economic theory, under my humble opinion. So the relevant variables, whether independent or control, could be the presence of CSR regulations (dummy variable), overall ranking given to the country in CSR performance at macro level and trade openness indicators, and so on.
In this case, the composite variable can be useful because of the variable's relationship with other factors i.e. environment= air +water+social+temparature and so on which can be added.
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